Home Business South African rand starts week stronger following US jobs report

South African rand starts week stronger following US jobs report

by centra
South African Rand coins are seen in this illustration picture taken October 28, 2020. REUTERS/Mike Hutchings/Illustration

South Africa’s rand strengthened early on Monday, continuing to trade on the front foot after a disappointing U.S. jobs report made investors push back expectations for when the Federal Reserve will begin tapering stimulus measures.

At 0650 GMT, the rand traded at 14.3000 against the dollar, around 0.2% firmer than its previous close.

The dollar (.DXY)hovered near a one-month low versus peers. 

The rand rallied on Friday after the U.S. jobs report came in below market expectations, as the Fed has made a labour market recovery a condition for paring back its pandemic-era asset purchases.

South African Rand coins are seen in this illustration picture taken October 28, 2020. REUTERS/Mike Hutchings/Illustration
South African Rand coins are seen in this illustration picture taken October 28, 2020. REUTERS/Mike Hutchings/Illustration

Along with other risk-sensitive currencies, the rand moves regularly on shifts in the outlook for U.S. monetary policy.

This week’s economic data releases include South Africa’s second-quarter gross domestic product (GDP) figures (ZAGDP=ECI) on Tuesday, as well as July manufacturing (ZAMAN=ECI) and second-quarter current account (ZACACT=ECI) numbers on Thursday.

Analysts polled by Reuters predict that GDP expanded 0.6% quarter on quarter (ZAGDPN=ECI), seasonally adjusted but not annualised, in the April-June quarter — down from 1.1% in the prior three-month period, reflecting a sluggish economic recovery from the COVID-19 pandemic.

The government’s benchmark 2030 bond was little changed early on Monday, with the yield dipping 0.5 basis points to 8.805%. @REUTERS


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